Is it identity theft or existing account fraud?
Here’s how a lot of people find out about it:
- The waitress comes back with your credit card saying, “I’m sorry, sir, but your card was declined.”
or
- The credit card statement says you owe a minimum payment that includes a $39 fee for exceeding your $6,000 credit limit by $376, but the last time you used that card the balance was only $452.
Sounds like identity theft, right? Wrong.
There’s a fine distinction between identity theft and existing account fraud. In the scenarios above, what has probably occurred is existing account fraud.
Here’s the difference: If someone uses your personal information—your name, Social Security number, etc—to open new credit card accounts, new utility accounts or take out new loans, then you’re a victim of identity theft. However, if someone obtains your credit card number and makes purchases on your account, you’re a victim of existing account fraud.
How does it happen? Look again at the first scenario described above. The meal was great, the service was terrific, and you’re planning to give the waitress a 25% tip. But when she walked away with your credit card, she ran it through a skimmer she carries in her apron pocket. Now she has everything she needs to make purchases on your credit card account.
It can also happen in the checkout line at the mall. Stores are crowded, and you’re already holding your credit card in your hand to hasten things along when you finally get to the register. You don’t think there’s anything strange about the guy in line behind you who’s standing so close. But, he’s standing where he is so he can memorize the numbers on your credit card.
Tags: existing account fraud, ID theft, identity theft, LifeLock discount code Defense